April 4, 2025 • 48 mins
This week, we dissect President Trump’s tariffs with former Treasury Secretary Lawrence H. Summers, and how EU’s capital markets might fare with Santander’s Ana Botin. Plus, we take a look at how private equity is growing the high-end tuna market.
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Episode Transcript
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Speaker 1 (00:12):
This is Wall Street Week. I'm David Weston bringing you
stories of capitalism. This week, we go to the waters
off of Mexico to see the role private equity is
playing in getting you that high end blue fin tuna
for your favorite sashimi. And we hear from Anna Botina
Santander about prospects for growth in the US and Europe
(00:32):
and how the crisis in Ukraine may serve as a
wake up call for the EU to make the financial
reforms it has needed for years. But we start with
the big story for global Wall Street this week, the
tale of Trump tariffs and what they may do to
the US economy. For his views on tariffs and the economy,
we welcome back our very special contributor, Larry Summers of Harvard.
Speaker 2 (00:55):
We will charge them approximately half of what they are
and happened to, so the tariffs will be not a
full reciprocal I could have done that, yes, but it
would have been tough for a lot of countries who
didn't want to do that.
Speaker 1 (01:11):
Will these increased costs be passed along the consumer? I
know you've taken a position on that. The Secuar and
Treasury current Secuary and Treasury Scott Besson has questioned exactly
why they would be passed on.
Speaker 3 (01:24):
I'm not going to get in a back and forth
with Professor Summers, And you know, maybe Professor Summers should
let the world know who his client lift is and
why he's talking about things like this, because he does
have professional clients away from Harvard. But you know, I
would also add that I have seven years of empirical
data and which showed that the China terrifts were not
(01:48):
passed on to the American people.
Speaker 1 (01:50):
What's your response.
Speaker 4 (01:51):
He's tried to call me out like I've got some
kind of importer clients who's paying me.
Speaker 5 (01:57):
That's ridiculous.
Speaker 4 (02:00):
Maybe we ought to pay some attention to the various
financial affiliations of all the people in the Trump administration
involved with Crypto.
Speaker 5 (02:10):
On the marriage, we've got a clear test.
Speaker 4 (02:13):
They put a tariff on steel, and the price of
stealing the United States is up thirty percent since inauguration day.
We got many economists at the Peterson Institute. There's a
different study in the American Economic Review that looked at
the effects of President Trump's tariffs in his first administration.
Speaker 5 (02:36):
Those are much smaller.
Speaker 4 (02:37):
Tariffs than are being discussed and put in place today.
But the evidence looks like it's pretty close to dollar
for dollar in terms of increased prices that consumers face.
And the economic logic is, if you put a dime
tax on a hot drug, the guys selling the hot
(03:00):
rug's going to sell it for ten cents more. If
he could have squeezed to suppliers, he would have already
squeezed his suppliers. Putting that ten cents on doesn't make
it any easier. So I don't understand the argument, and
I'm not alone among serious economists in not being able
(03:20):
to understand the argument that this will be absorbed.
Speaker 1 (03:25):
There was a lot of anticipation built up to this
so called Liberation Day this week, But by all accounts,
this is not the end of the process. This is
in the middle of the beginning of the precess, which
will lead to a lot more negotiation, bilateral negotiation. What
about the cost of uncertainty itself in this process of
President Trump trying to use tariffs to extract things out
of country.
Speaker 5 (03:44):
I see two things about that. First, the White House
can't have it both ways.
Speaker 4 (03:49):
Either of these taxes are a crowbar, These taffs are
a crowbar.
Speaker 5 (03:54):
Or they're a source of revenue, but you.
Speaker 4 (03:57):
Can't say they are a source of revenue, so we
don't need to worry about the deficit and then say
we're they're a crowbar because we're going to get rid
of them when other countries.
Speaker 5 (04:04):
Reduce their tariffs. That's just contradicting yourself.
Speaker 4 (04:08):
Look, all of us making decisions don't want to make
them when there are a whole bunch of cards that
are going to be turned over before too long. Whether
it's buying a washing machine, buying a car, buying a house,
or a business buying a factory. You want the situation
to settle down, and you want to have some sense of.
Speaker 5 (04:31):
Certainty before you act.
Speaker 4 (04:33):
How could anybody act with confidence when you don't know
what the price of steal's going to be, when you
don't know what the situation of your competitors is going
to be. So the traditional approach of policymakers is to
(04:54):
try to provide as predictable an environment as possible so
as to increase business confidence. And this new approach of
trying to maintain maximum flexibility probably is good for raising
the ratings of a TV show because you never know
what's going to happen next, but it's hard to believe
(05:18):
that it inspires the confidence that will be a basis
for investment.
Speaker 1 (05:23):
We talk about systemic risk when it comes to the
banking system. What about systemic risk the overall global economic system?
I mean, apart from the individual tariffs and what consequences
immediate might happen, how big at risk is there to
the system? And I will say, in the past, we've
had some shakeups. I mean, Margaret thatcher Ronald Reagan shook
up a lot of economics. Is this that sort of
(05:45):
a transformation or could it be more profound?
Speaker 4 (05:48):
I think a lot of, not everything, but a lot
of what Margaret thatcher Ron reign did was a necessary
corrective to various kinds of accesses. You know, we had
twenty percent interest rates in the United States. They had
piles of garbage twelve feet high on every street in London.
(06:10):
So I don't think that's the right example for thinking
about this at all. I think a better example is
the smooth Hawley tariffs that we saw. Now, the lore exaggerates,
but I think it's fair to say that the smooth
Holy tariffs contributed to making the depression great.
Speaker 1 (06:32):
Even the issue of smooth Holly raises the larger issue
where are we on the likelihood or probability of recession
or stagflation. Obviously we don't know where we are yet,
but where is that headed.
Speaker 4 (06:45):
I think the odds are on one side or the
other of fifty percent that we'll have a recession within
the next year. The indicators of sentiment, the psychological indicators,
are mostly running really very negative. The hard indicators on
(07:07):
what's actually happening are less negative, but they've had less
time to adjust and are more backward looking and are
less forward looking. So I think the odds of a
recession are probably fifty to fifty. And part of the
reason I think they're as limited as that is because
(07:31):
I think there's some prospect that, particularly if things turned downwards,
they'll be a reversal in course.
Speaker 1 (07:38):
What does this do for some of our economic rivals?
I mean, during the first administration of Donald Trump, he
really focused on China, not exclusively, but really predominantly. This time,
maybe it's not quite so sure. But if you're sitting
in Beijing right now, if your president g how do
you react to these tariffs?
Speaker 5 (07:54):
What does it do to your situation? You know?
Speaker 4 (07:57):
I think it goes beyond the tariffs, David. In China,
the signal event in the lives of people your age
and my age in China was the cultural revolution, when
the government turned against all the traditional leading institutions of society.
(08:19):
And what I hear and see is that the Chinese
see that we are having a kind of cultural revolution.
They also see it as a huge opportunity because they
know better than anyone else how much damage a cultural
(08:40):
revolution can do to a society. And they see us
alienating all our traditional friends, and they see us increasingly
internally divided, and they see us focused on domestic vengeance
rather than global challenges, and they have to see that
(09:04):
as a very big opportunity and perhaps even as a
strategic gift.
Speaker 1 (09:11):
Larry, you always admonish me and us not to overreact,
not to over predict what's happening. So I wander careful
not to do that. But what you're talking about really
goes to the rule of law, which sounds like it's
a really nice concept, but maybe we don't always remember
how that undercurds are capital markets the entire economy. Now,
as you say, we're not at the cultural revolution, but
(09:32):
even shaking it a bit in that direction. When do
we start to see that in barring costs the cost
of capital.
Speaker 4 (09:37):
One of the things people have talked about is American exceptionalism,
and one aspect of American exceptionalism is that multiples the
ratio of prices to earnings are higher here.
Speaker 5 (09:51):
And that's for many reasons.
Speaker 4 (09:52):
But one of those reasons is that if you have
earnings today here, it's more secure than you're going to
have earnings tomorrow because you can count on your property rights,
you can count on being able to enforce contracts. And
if we start attenuating the rule of law, that starts
to go away, and that can take a turn two turns,
(10:16):
three turns off of price earnings ratios, and that's a
loss of trillions of dollars of investment. And so we
take for granted that we make investments with partners, and
we have lawyers who write contracts, and then we know
(10:38):
that contracts.
Speaker 5 (10:40):
Will be enforced.
Speaker 4 (10:42):
You know, one of the things I used to not understand,
and I think I understand better today is why it
is that in so many parts of the world you
have these family clan businesses that are in twenty different industries,
and we have so little of that in the United States,
(11:03):
And the answer is that if you don't have contracts,
then what you have is blood, and so you get
these clan businesses because you can't trust people outside of
your clan, and so you choose your cousin rather than
the best person. That's a price those societies pay economically,
(11:24):
and because we've been so good at the rule of law,
it's not a price that we've paid in the last century.
Speaker 5 (11:34):
But we may be moving back a bit in that direction.
Speaker 1 (11:42):
Coming up, as the US comes to terms with Trump tariffs,
Europe does an about face on defense spending. We talk
with Anna Botine of Santander about what it could mean
for her bank and potential reform of capital markets. This
(12:05):
is a story about two economies in transition. In the
United States, as President Trump shakes the foundations through tariffs.
Speaker 2 (12:12):
Foreign nations will finally be asked to pay for the
privilege of access to our market, the biggest market in
the world, where right now the biggest market in the world.
We had a great country four years ago in terms
of the economics. We were doubling up when China we
were doing so well, nobody was going to catch us.
Speaker 1 (12:30):
And in Europe suddenly facing the need for massive defense
spending it never really expected.
Speaker 6 (12:36):
The era of the peace dividend is long gone.
Speaker 7 (12:40):
The security architecture that we relied on.
Speaker 6 (12:44):
Can no longer be taken for granted.
Speaker 3 (12:47):
The age of spheres of influence.
Speaker 8 (12:51):
And power.
Speaker 6 (12:52):
Competition is well and truly back.
Speaker 1 (12:56):
While the new administration in the US slashes regulations and
the size of the government to keep the country competitive,
the EU is dealing with a stalling economy that is
falling behind its western piers.
Speaker 7 (13:08):
So the US has something really important, which is what
I call a growth mindset. So whatever government is in place,
it has always been more pro growth.
Speaker 1 (13:19):
Anne Boutine is the executive chair of Santander Group, the
fourteenth largest banking institution in the world, with operations in
Europe and the Americas North and South. Thirty eight percent
of its net revenue comes from Europe and South America
comes in second, contributing thirty two percent.
Speaker 7 (13:38):
You can see that in the growth of the last
decade than Europe. So it's early, but I believe that
that is a very positive sign. And as I like
to say, Europe is awakening and the alarm clock has
been President Trump because what I have never seen is
the President of the Commission saying that we're in extraordinary
(14:01):
times and we need to take extortly measures. So it's
not just good for the US, it's good for Europe.
What's happening is good for growth. It's good for citizens
and society, because I believe that is. I mean, there
are the factors that are not as positive, but this
is a very positive signal that businesses will be able
(14:22):
to do more, invest more and create more growth.
Speaker 1 (14:25):
Are we seeing action yet and how much of it
is being triggered frankly by what's going in Ukraine and
European countries deciding they really have to step up and
spend more on defense.
Speaker 7 (14:35):
It's a combination, I think geopolitics and what's going on
in Ukraine, but also the economic, let's say, policies of
the US administration. So I think both of those drivers
for what I see, as you know, the German awakening,
the lifting of the breaks on debt, Germany lifting the
brakes on debt. It's harder except when Europe isn't a crisis.
(15:00):
Feeling now in Europe is we are in a crisis
or we could get into a crisis, and unless we
do something fast, and so there is a sense of
urgency I have not seen before and this is good
also for companies and banks. I mean, we do business
in Europe. You know, one of our biggest markets is Spain.
Spain is going to grow at those two and a
(15:20):
half even three percent depends on who you ask. So yes,
I think what's going on is both structural but also
due to the pressure that we're feeling on both the
war and the economy.
Speaker 1 (15:33):
It wasn't always a positive picture for Spain. During the
European debt crisis of the late two thousands, Spain was
among the five EU member states that were struggling to
repay their debt. Now it's economic growth outpaces Germany, France
and the United Kingdom. Part of the problem is a
European wide monetary policy coupled with fiscal policy run by
(15:54):
the member states, often in different directions. What about capital
markets in Europe, because it's been thought that part of
the driver of growth in the United States has been
the robust capital markets. So people want to raise capital
to invest in, for example, startups and tech companies. Can
you move in that direction to have more robust capital markets?
Speaker 7 (16:15):
This is one of the big goals we've had for years. Again,
what's happened. The awakening that I can see in Europe,
led by Germany and possibly France, means that Germany will
invest one trillion euros one trillion dollars over the next
decade in defense and the way they're going to finance
(16:35):
that is through a common eurobond. So that effectively is
one of the potential drivers for this Common Capital Markets Union,
which we call it in Europe, which again is good
for banks.
Speaker 1 (16:47):
What is the role of regulation in all of this?
I mean, when it comes to the United States. You
famously asked President Trump about deregulation at Davos earlier this year.
What are the regulations that can help or hinder what
you want to do? At Santadre.
Speaker 7 (17:03):
So, regulations matter, That's why I asked the question. I've
been very vocal about this. It's about regulation, but it's
also about supervision, how the agencies interpret the regulation, and
this is one of the quick wins. That's why I
asked the question. So I see governments as enablers for business.
Businesses create wealth, you know, create companies and jobs. That's
(17:26):
where you know, we pay taxes. Government can deliver other services.
So just by getting the balance right on regulation. And
at the end, regulation is there to protect consumers, but
if you overprotect them, you don't grow.
Speaker 1 (17:41):
The European Commission turned to former ECB President Mario Draghi
to study the effects of the single market and competitiveness
in the EU. In the report, published in September twenty
twenty four, Dragi says regulation should be designed to facilitate
market entry, not become a bear to Europe's goals.
Speaker 9 (18:01):
A little over a decade ago, the US and European
GDPs were They weren't exactly on top of each other,
but they were pretty close sixteen versus fifteen roughly. And
now the European GDP is fifteen or sixteen trillion, I think,
and the US GDP is about thirty trillion over the
course of a little more than a decade. And that
(18:23):
is a function. Again, that's a function of a lot
of things, but it's a function of a lack of
investment in productivity and an over regulation of the European economy.
And just as I think that we could have a
significant effect on American growth by streamlining our regulation, I
think you could have an even more dramatic effect on
(18:45):
European growth if they were willing to undertake that deregulatory project,
some of which has been suggested recently by Mario Draghi.
In his report delivered to the European Commission.
Speaker 1 (19:00):
During his tenure as Vice Chair of the Federal Reserve,
Randy Korrels dealt with policy recommendations for regulating financial institutions.
He agrees with drog these concerns that regulations have played
a part in holding Europe back.
Speaker 9 (19:14):
They really haven't created a European wide financial regulatory system,
and that fragmentation contributes to a great deal of cost.
Where there are not conceptually dramatic, but material and important
differences from one jurisdiction to another within Europe with respect
(19:34):
to financial regulation that continue to increase cost. And so
from my point of view, the most important thing that
Europe could do would be to accelerate in advance its
europe wide framework for financial regulation, even more than some
of the important particular changes that they could make. If
(19:57):
Europe could refine its relation of capital provision. The venture
capital ecosystem in Europe, for example, is very underdeveloped, and
the provision of financing really of any sort to startup
companies is not terribly robust, certainly compared to America. The
reason that we have such an advanced tech sector is
(20:19):
that for decades we have had nurtured, tried to develop
a capital financing system that supports the provision of capital
to these risky startup enterprises. And Europe has not done that.
Were they to make changes to the governance of capital
provision that supported particularly that sort of financing, I think
(20:42):
you could, in a relatively short period of time, call
it a decade, make a big dent in that when
you consider how much the technological landscape has changed in
the United States, how different the technologies that are being
deployed now in the US are from what they were
ten or fifteen years ago, all of which supported by
(21:02):
our financing system. If Europe had had a financing system
that was as well geared as ours to supporting that
kind of innovation, they would have participated in that to
a much greater degree than they have.
Speaker 1 (21:15):
Unifying capital markets is not a new concept to Europe,
but the idea has never really gotten off the ground,
and Quarrels thinks that the Trump effect might be what
Europe needs to start moving towards making the changes it needs.
Speaker 9 (21:29):
I think it's true, nonetheless, that Europe has had a
wake up call and it's been very unpleasant. But I
have talked to a number of European policy makers over
the course of the last month that really hasn't been
much more than a month. That seems like it's been
much longer than that. Certainly seems like that to the Europeans,
and there is a intensity and practicality to what they
(21:52):
are now saying they would be prepared to do in
the way of accelerating regulatory change, accelerating investment in defense
that really never was there before. And again, well, it
has been unpleasant medicine, I think it could have a
very good result for Europe.
Speaker 1 (22:10):
In a global economy, the race to grow is not
a solo sport.
Speaker 9 (22:15):
Economics and economic growth is not a zero sum game.
When you have a vibrant Europe, that is you know,
that's better for us. There are many many win win
opportunities when you have two dynamic economies that are interacting, competing,
partnering with each other, and you know, we would be
(22:37):
much better off if Europe were economically healthier than it
is currently.
Speaker 1 (22:42):
And Anna Boutein believes that opportunity for growth and scale
and diversification is the path forward for Santander as well.
Speaker 7 (22:52):
Going back to the key competitive advantages of Santander Global
and in market scale one hundred and seventy three million customers,
one of the largest consumer basis in the world. The
second key strength is diversification. We do better when things
get difficult because we have geographies and businesses that tend
(23:12):
to compensate each other. Now, having said that, we obviously
factor geopolitical risk into our risk analysis, and this is
where being a bank that has been around for one
hundred and sixty eight years helps, right, So we've gone
through many crises, We've gone through Industrial revolution. You know,
we're going through another change in an era right now
(23:32):
with AI, and so we factor that into our processes
and that's one of the things that we do, I
believe better than others.
Speaker 1 (23:43):
Coming up the story of how all that delicious tuna
you enjoy at high end restaurants makes it from the
sea to the table with a little help from private equity.
That's next on Wall Street Week. This is a story
(24:05):
about investing in fish. Those giant bluefin tuna favored by
the best sushi restaurants in New York and all around
the world. Our colleague Danny Berger went to the waters
off of Mexico to see where it comes from and
how private equity is helping to make sure we can
all enjoy it even as demand grows.
Speaker 10 (24:31):
You can thank private equity for this tuna farm. In
November twenty twenty three, a group of investors purchased a
majority steak in Baja Aqua Farms, a producer of high
quality sashimi grave bluefin tuna in the Pacific Ocean off
of Baja California, Mexico.
Speaker 8 (24:47):
This is the only farm in the world that is
being fed by a centralized figure. So there is no
other feeding vessel like this one in the world. So
this was designed by us in integration with Mexicanca Company
and a Chillian company that was working on the engineering
behind this. It's always looking for efficiencies. This vessel what
(25:08):
basically does It receives the sardines from the fishing vessel
that is pumps on the fishholds. Then we grabbed that sardines,
we put it in a big fishhold that we have
here on the main deck, and then with those the
sardines two different cages.
Speaker 10 (25:24):
Baja story began in nineteen ninety nine with just a
few pens and when growing consumer demand was pushing the
industry to the brink.
Speaker 11 (25:33):
If you look at this story of all these familiar
business which baff was not really a family business, but
it was really shape as a family business.
Speaker 10 (25:43):
Manuel Vanscez, a veteran of Nastli and other food companies
around the globe, arrived at Baja Aqua Farms in March
of twenty twenty three as the company CEO this fishery.
Speaker 11 (25:54):
For a long time, it was seen with very bad eyes.
I'm going back to twenty ten, okay, and at that
time the fishery was over fish. There were some indicators
that were saying that in general, all the countries that
are fishing these which is all the way from Japan
to America and Mexico, they were abusing a little bit
(26:15):
on the way that they were taking fish out of
the water. Hence it wasn't danger. We are not fishing
small fish, so we are giving the time for the
fish to reproduce several times before it gets caught. Right
and by definition, if you have an eighty five kilog fish,
you're talking about fish that is more than ten years old,
that has passed that process several times, and then you
(26:38):
can be one hundred percent sure that going forward then
there will be more. And this is really a cycle
that is virtuous and is reproducing, going on and on
and on.
Speaker 10 (26:50):
According to Noah, US, commercial fishers harvested three hundred and
sixty eight metric tons of Pacific blue in tuna in
twenty twenty two, grossing more than two zero point two
million dollars on the dock revenue, which accounts for ten
percent of total Pacific bluefin tuna landings that year. Baja
is in the right place for the business. Japanese and
(27:10):
Mexican vessels harvest the majority of the annual catch. It
starts with the actual fishing. There are two commonly used
methods in the Pacific commercial and recreational fissures either use
hook and line or persains. Baja ops to use per sins,
which are massive nets used to capture the fish but
not lift them out of the water.
Speaker 8 (27:30):
We are now working with the fine tunings, so we
have to improve this vessel. We have to bring another
vessel to the rest of the cages because we are
capable to fit twenty four here, but we have forty.
We're going to have fifty in the next July. So
we got to move fast because if we want to
keep all the benefits that we've been gaining with this
investment in the other cages, then we got to replicate this.
(27:51):
So the next thing is to come with another grid,
and then we have to bring another feeding vessel like
this one, and that requires money.
Speaker 10 (28:01):
How much could you theoretically grow by double the size
of what you have here?
Speaker 8 (28:05):
Yes, yes, we can go with double ba.
Speaker 10 (28:09):
Aqua Farms hunts by air for schools of wild bluefin
tuna in the Pacific corrolse them and towes them to
their farm pens off the coast of Ensenada, Mexico. There
they feed and tend to the fish's environment until they
reach the ideal size for market, harvest them and bring
them to their processing facility on land. The fish are
(28:30):
graded for quality and either cut or packed hole for
shipment to customers enter private equity.
Speaker 12 (28:37):
These are one hundred and seventy five to two hundred
pounds a piece, and most restaurants in the country didn't
actually need that much tune at one time. So what
restricted actually who the company could sell to.
Speaker 10 (28:49):
Equity Group is the private equity investment arm of the
Zell family, founded by billionaire investor Sam Zell, who passed
away in twenty twenty three. It still invests cell family
assets target and not specific industries, but certain features.
Speaker 12 (29:03):
Run companies, and I used to work at Coca Cola,
and I ran budget, ran a car, and I ran
a software company, which I think is a little a
typical for somebody as a president of an investment firm.
I think it's relevant because what's going on in private
equity right now. You know, there's lots of capital, and
there's lots of firms and a lot of competition. We
(29:24):
cut across a lot of industries. So we're in healthcare,
we're in agriculture, oil and gas, real estate. We have
a company that sells software to the NSA, so you
name it. We cut across a lot of industries. We're
usually looking for something about the industry and something about
the company where there's a barrier or some type of
(29:45):
structural advantage. So what that makes us do is actually
look across different sizes and in particular different industries.
Speaker 10 (29:54):
In early twenty twenty three, rather unusually, a number of
investors heard about the promise of tune A Fie fishing
and Baja Aqua farms at the same time.
Speaker 12 (30:03):
There's a lot of strong growth in the bluefin tuna market,
so inherently it's been growing for decades. And then on
the supply side in the industry, it's a regulated global market,
so there are quotas internationally. You can't just go out
and fish as much as you want. In each country.
There are concessions, so you have to have the right
(30:23):
and a concession to actually grow the tuna. And then
there's actually licenses that you need for the fishing boats
and the captains. So the demand's growing and the supplies
got some controls around it. So that's what we liked
about the industry. The company has got a few structural
advantages that we really appreciated, and they revolve around its proximity.
(30:45):
It's based in Mexico, and this industry, you can imagine
a tuna is heavy, right, two hundred pounds, and so
shipping a tuna, especially air freight, is very very expensive,
so are competitions in Japan and the Mediterranean. Mexico, so
the proximity to the US is a huge advantage for
this company to ship fish from Mexico into the US,
(31:07):
so that's one. The second one is the labor cost
in Mexico is cheaper, so there's an advantage there. And
then the third component is just the cost of feeding
the tuna. So you feed them anchovies, you feed them sardines,
and structurally it's been really a positive that where we
fish for the tuna off the coast of Mexico is
very close to where we fish for the sardines, so
(31:29):
that lowers the feed cost.
Speaker 10 (31:32):
Conti, Cultiba Equity Group and Cassel Harlan purchased a majority stake,
leaving dry Powder in their arsenal for ongoing support. They've
also each sent an executive to Bajas board. The goal
is essentially the same as any other private equity investment,
grow the customer base, expand to new markets, and invest
in new technology, equipment and staff.
Speaker 6 (31:57):
We have the best brothers them as we tried who
Growwindo Martin and as we have more supply now.
Speaker 1 (32:01):
Because the colt that has increased. Now the real challenge
is to build those markets.
Speaker 13 (32:07):
We are waiting the fish older, so after we grade it,
then they're cutting the tail and those guys over there,
they are going to win the fish.
Speaker 6 (32:17):
So they are going to put again this camp with
the exact wave of the product before putting it into
the bus. So if it is going to Japan, and
we'll go to one side, Brazil, Colombia, Lubai, the state's
interial east coast, west coast and.
Speaker 10 (32:32):
Make this incredibly huge logistics operation. It is it is fresh, Well, yeah,
it's fresh. It's so many different sizes. You're shipping it
literally all over the world and you have to, I
guess calibrate as each one comes in which client it's going.
Speaker 11 (32:47):
To, Yes, indeed, and then we are tracking over there
and obviously the distance from one point to the end point,
so there's airports connections. Even the barcoo that you.
Speaker 2 (32:58):
See over there in the mouth of the y it's
also ours.
Speaker 13 (33:01):
It's just just a software that illustrated inside. There is
also a thermometer that is coming into the fish and
is tracking the temperature of the fish from that boy
until you up in the bus.
Speaker 11 (33:16):
We will need to expand and that's a challenge too,
So it's a bit of testinal the promises. As you
can see, there's no machine but.
Speaker 6 (33:24):
That can actually replace these labor because of these specifications
that we have in the product and what you have
on the value proposition through our consumer. But at the
end of the day, yeah, we will need to expand
and get more people and more production lines in order
to bring all this volume.
Speaker 10 (33:39):
Into the company.
Speaker 1 (33:42):
And that's where we turn next to how a private
equity firm founded by Sam Zell stepped up to provide
the capital and the expertise Baha needed to grow its business.
(34:07):
EGI joined with others to provide the capital Baja Aqua
Farms needed. How is that capital being deployed and how
is it changing the way Baja does its business. Dannie
Burger continues the story.
Speaker 10 (34:23):
After nearly a year and a half with private equity
on board, Baja is putting its new capital to work.
Speaker 8 (34:29):
We got an investment plan of around five millions per
year which is going entirely to fishing assets, to farming assets. Yeah,
so you keep things running right, so you have maintenance
kpex and then growing kepex. We have a plan for
eight millions this year which is a new vessel that's
(34:51):
going to be incorporated to the fishing fleet, and then
we have some growth kapex that's going to be here
at the farm. You see around mooring grates right, So
there's a big bound of cages there, thank cages there,
tank cages there all together in a solitary mooring system.
(35:11):
And also we have some solitary systems which is holding
one cage. So this year we're investing another million in
putting another grid. So we're putting gauges together like this
one to facilitate the feeding.
Speaker 10 (35:25):
Equity group, along with the rest of the investor consortium,
owns a majority stake in Baja. The goals of private
equity in any investment are the same, grow the company
and get a return on the investment. But egi's timelines
are different from what you would expect when you think
of private equity. So you mentioned it takes some time
you have to capital into this business to get the
returns you want. What does an exit look like for
(35:48):
something like Baja Aqua Farms.
Speaker 12 (35:51):
We don't put a time horizon on our investments. It's
actually something that's a little different, I think from most
pe firms. Most of them comes from Sam Zell and
his family, so we're a principal investor and we sell
when we've extracted as much value as we think we can.
We really haven't even begun to penetrate the United States.
(36:12):
There's new products that we can develop, and we're even
going to explore maybe potentially other geographies to ficient. So
there's a lot of growth potential here. We've held companies
for five years, we've held companies for fifteen. It's all
just a function of how much more growth we think
is out there.
Speaker 10 (36:29):
Recently, private equity exits have taken longer and longer to execute.
According to a twenty twenty five Mackenzie outlook for global
private markets, average buyout whole times remain above the long
term average at six point seven years. That compares to
the average of five point seven years over the past
twenty years. Is there a way to get returns out
of the company? Do you look for ways to get
(36:50):
dividends of sorts and the lead up to the exit.
Speaker 12 (36:53):
Yeah, no, for sure. That is actually a really core
part of what we do. Part of it is MEYBI
in an operation is very focused on that. We do
expect our companies to generate cash and it's just kind
of mandatory for us. Some of that is the investment
thesis understanding the type of business that we invest in.
But absolutely we're not going to hold something for ten
(37:14):
years and not take money out of the company. You know,
maybe the first year or two the company net isn't
generating cash because we're investing. We're putting in new technology,
new people, all the things I've talked about. But absolutely
there's an expectation that we're diving ending money out and
as the EBADAG grows, as the profits grow, will also
every few years recap the business and take money out.
(37:35):
That way, you know, our expectation is four or five
years in if things are tracking, we've got all our
money out of the investment that we've put in.
Speaker 10 (37:45):
Equity Group's patient capital and holding times may be different
from their pepers, but one thing is the same. Private
equity ownership means big changes for the companies that they own.
Speaker 12 (37:57):
The company was selling in the US, but they were
using one distributor, mostly in southern California. So we've helped
them roll out that we have now I think eight
distributors across the entire US. We're also not just using distributors,
we're actually building a salesforce going into the markets and
selling the restaurants directly. So there's things like that that
(38:18):
we help the company put in place, and that's going
to create growth in and of itself. Just at one point,
we've gone from three countries when we bought the company.
We're up to nine right now, and so we're expanding
in these other geographies. They've got their own consumer demand,
they've got their own regulatory environments, so there's a lot
(38:40):
of different issues you have to work through as you
roll into new countries. Another aspect, which is enormous is
when we bought the company and they sold tuna, they
would actually sell the entire tuna. So if you're a
restaurant and you wanted fresh bluefin tuna, you would have
to buy the entire fish. These are one hundred and
(39:01):
seventy five to two hundred pounds a piece, and most
restaurants in the country didn't actually need that much tuna
at one time, so it restricted actually who the company
could sell to. So we're working on a project right
now where we're going to sell loines, which is just
basically selling part of the tuna, and that's going to
open up probably tenfold as many restaurants as we're selling
(39:26):
to right now.
Speaker 10 (39:28):
Jeffs Franklin Becker and Robbie Cook of coral Omakasse in
Point Seven in New York source tuna from Japan and
the East Coast of the US. Their merchants used similar
practices to Baja, no catching tuna and nuts, no antibiotics,
no hormones, native and national feed traceability and ECOGIMA. You're
a veteran in this industry. You've worked with lots of
(39:49):
different kinds of meat, different types of fish. Can you
just talk about working with bluefin tuna? About how special
and different that is?
Speaker 14 (39:56):
Bluefin tuna. It's so unique because because it's just got
the right amount of fat and the right amount of
marbling throughout the structure the fish is is it's just
a beautiful fish at the end of the day, robust
in flavor, beautiful color. When you get down into the
chewturo and the o touro, which is the medium fatty tuna,
(40:19):
and the fatty tuna just melts in your mouth.
Speaker 10 (40:22):
What do you make about this, this current moment of
the popularity of the fish itself.
Speaker 14 (40:26):
You know, for a while it was overfished, and for
a while people were kind of avoiding it, including myself,
and thankfully the populations come back in a big way.
They also do a process called ikagema, which is basically
they stick a rod into its head, into its spinal
cord and they bleed it out that way, and that
(40:50):
prevents all the fish from basically atrophying the wrong way
and the meat becoming tough, so that kind of keeps
it really nice.
Speaker 10 (41:02):
Point seven and coral omacasse are also examples of demands
for cuts of fish, not the entire bluefin.
Speaker 14 (41:09):
If you're buying the whole fish, you're buying it because
a you have the storage space to handle it, which
is a huge commitment all on its own, you're going
to be able to turn it over. You have multiple
restaurants in my case, with a twelve seat o macasse,
it does not make sense.
Speaker 10 (41:27):
Beyond the quality of fish. Fuel and growth at Baja
Aqua Farms meant new boats, more sophisticated and scalable IT systems,
net cleaning and other maintenance systems, a larger sales staff,
and crucially a new CEO.
Speaker 12 (41:41):
We start with trust and transparency. I mean, if we
can't work together, that's going to be just a non starter.
We look for alignment. It doesn't mean we always agree,
But can we all see true north?
Speaker 4 (41:55):
Can we all.
Speaker 12 (41:55):
Agree that the direction we're going in makes sense? So
that's got to be there. And then look, you know,
leaders have to inspire. They have to hire good management themselves.
Have they built a good organization? Have they built a
good structure? Have they hired talented people to people like
working there?
Speaker 10 (42:14):
New management comes with the territory. When private equity comes
to the scene with a one of a kind feeding system, efficiencies,
new products and markets. It's up to the CEO to
manage and execute growth. His goal is to add one
thousand more metric tons of tuna sales every year from
four and twenty twenty four to five thousand this year
and six the next. What do you think are some
(42:36):
of the biggest changes that have been put in place
since you and the investors have come in.
Speaker 11 (42:40):
In order to have the same product with the same quality,
always right, with the same timeline, with the same freshness,
with the same everything, you need to have a process.
And in order to scale a business, you need to
have those processes all around the company, even from the
way that we fish, the way that we grow the fish,
(43:02):
to the way that we go and do the logistics
to the final restaurant that we have grow, grow, Grow growth.
Last year there was a significant change also because of
all these things that I'm telling you and the way
that we're fishing. So they increase fifty percent the quota.
That means that this year, for the first time.
Speaker 3 (43:21):
On the last.
Speaker 11 (43:23):
I would say, fifteen years, we are allowed to go
and finish more fifty percent more of what this stack
or this gap was allowing ones to get. As a
result of that, if you are bringing that supply into
the market, you need to grow the market very responsibly.
And for that we created three different segments now which
(43:47):
is ready to God, ready to serve, ready to eat,
to have an investor group that believes in that vision
and that is not only endorsing it, but it's facilitating
the way to go there much more fast.
Speaker 10 (44:01):
What has been the biggest difference or surprise or change
for you to work with a company that's private equity.
Speaker 11 (44:07):
Backed that is always the smarter people in the room
than me. Yeah, it's always challenging. Yes, And when I
am with this diverse group of people and I hear
all these ideas, there will always be things that I
have not seen or comments that I have not heard
(44:28):
or even ideas that I never thought of. But that
is actually very exciting. On the downside, I told you
what it was. On the good part of it is
that it's always keeping me at the edge and with
all this adrenaline and trying obviously to improve as a
person and also to try to grave all these knowledge
(44:50):
that is there out. We don't take a fish out
of the water unless it's already solved, which is very
very important for us.
Speaker 10 (44:56):
What markets do you want to expand into?
Speaker 11 (44:59):
South America? Very interesting and we are moving forward very
rapidly there. Middle East looks very interesting and we want
to also check that market, and specifically the East coast
of the United States is also very important to us.
We are very strong on the West, but if you
move east, then we start seeing some white spots. So
(45:25):
now we change that strategy. We actually got the country
in five different regions.
Speaker 10 (45:32):
Almost exactly a year after the Investor Group acquired at Stake,
a new presidential administration won the White House promising tariffs
specifically aimed at products from Mexico. How do you think
about those costs and who they go towards? Do you
push that forward to the consumer? Do you push it
forward to someone else.
Speaker 12 (45:50):
We're in a lot of industries that we hold companies
for a while and we see the environment change, sometimes positively,
sometimes negatively. So it could be the consumer. Could we
own a hospital chain and we owned it and managed
it through COVID, so we dealt with that, that's a disruption.
We own a warehouse company on the East coast ports
(46:11):
and we dealt with the Baltimore Bridge collapse. So you know,
and we're in cyclical industries. We're in oil and gas,
we're in real estate, we're in agriculture, so we see
most of our companies actually have a lot of ups
and downs. Tariffs are just, in my mind, another type
of headwind that a company potentially is going to face
(46:34):
for some period of time in terms of if there
are tariffs and how we'll manage it. Look, I think
the answer is going to be it's the cost is
going to get spread. We'll probably end up absorbing some,
some will get passed along to the consumer. If you
remember the value chain here, there's the consumer, there's the restaurant,
there's the distributor, there's ourselves. So there's a series of
different ownership groups all along the value chain. And I
(46:57):
guess is every part of the value chain absorbs or
part of that.
Speaker 10 (47:01):
Cost tariffs aside, everyone along the food chain recognizes what
matters to consumers in the marketplace.
Speaker 14 (47:07):
You can have a bad fish coming out of Japan
the same way you can have a bad fish coming
out of California or Spain or North Carolina. It all
comes back to the beginning. How is that fish caught,
how is it killed, how is it preserved? What did
they do? How long was it on the boat? All
of these things matter. It comes down to authenticity. It
(47:30):
also comes down to the fat content, and it just
melts in your mouth and it becomes this experience that's
almost religious.
Speaker 11 (47:40):
I mean, that's it.
Speaker 1 (47:46):
That does it for us here at Wall Street Week.
I'm David Weston. This is Bloomberg. See you next week
for more stories of capitalism.
This is Wall Street Week. I'm David Weston bringing you
stories of capitalism. This week, we go to the waters
off of Mexico to see the role private equity is
playing in getting you that high end blue fin tuna
for your favorite sashimi. And we hear from Anna Botina
Santander about prospects for growth in the US and Europe
(00:32):
and how the crisis in Ukraine may serve as a
wake up call for the EU to make the financial
reforms it has needed for years. But we start with
the big story for global Wall Street this week, the
tale of Trump tariffs and what they may do to
the US economy. For his views on tariffs and the economy,
we welcome back our very special contributor, Larry Summers of Harvard.
Speaker 2 (00:55):
We will charge them approximately half of what they are
and happened to, so the tariffs will be not a
full reciprocal I could have done that, yes, but it
would have been tough for a lot of countries who
didn't want to do that.
Speaker 1 (01:11):
Will these increased costs be passed along the consumer? I
know you've taken a position on that. The Secuar and
Treasury current Secuary and Treasury Scott Besson has questioned exactly
why they would be passed on.
Speaker 3 (01:24):
I'm not going to get in a back and forth
with Professor Summers, And you know, maybe Professor Summers should
let the world know who his client lift is and
why he's talking about things like this, because he does
have professional clients away from Harvard. But you know, I
would also add that I have seven years of empirical
data and which showed that the China terrifts were not
(01:48):
passed on to the American people.
Speaker 1 (01:50):
What's your response.
Speaker 4 (01:51):
He's tried to call me out like I've got some
kind of importer clients who's paying me.
Speaker 5 (01:57):
That's ridiculous.
Speaker 4 (02:00):
Maybe we ought to pay some attention to the various
financial affiliations of all the people in the Trump administration
involved with Crypto.
Speaker 5 (02:10):
On the marriage, we've got a clear test.
Speaker 4 (02:13):
They put a tariff on steel, and the price of
stealing the United States is up thirty percent since inauguration day.
We got many economists at the Peterson Institute. There's a
different study in the American Economic Review that looked at
the effects of President Trump's tariffs in his first administration.
Speaker 5 (02:36):
Those are much smaller.
Speaker 4 (02:37):
Tariffs than are being discussed and put in place today.
But the evidence looks like it's pretty close to dollar
for dollar in terms of increased prices that consumers face.
And the economic logic is, if you put a dime
tax on a hot drug, the guys selling the hot
(03:00):
rug's going to sell it for ten cents more. If
he could have squeezed to suppliers, he would have already
squeezed his suppliers. Putting that ten cents on doesn't make
it any easier. So I don't understand the argument, and
I'm not alone among serious economists in not being able
(03:20):
to understand the argument that this will be absorbed.
Speaker 1 (03:25):
There was a lot of anticipation built up to this
so called Liberation Day this week, But by all accounts,
this is not the end of the process. This is
in the middle of the beginning of the precess, which
will lead to a lot more negotiation, bilateral negotiation. What
about the cost of uncertainty itself in this process of
President Trump trying to use tariffs to extract things out
of country.
Speaker 5 (03:44):
I see two things about that. First, the White House
can't have it both ways.
Speaker 4 (03:49):
Either of these taxes are a crowbar, These taffs are
a crowbar.
Speaker 5 (03:54):
Or they're a source of revenue, but you.
Speaker 4 (03:57):
Can't say they are a source of revenue, so we
don't need to worry about the deficit and then say
we're they're a crowbar because we're going to get rid
of them when other countries.
Speaker 5 (04:04):
Reduce their tariffs. That's just contradicting yourself.
Speaker 4 (04:08):
Look, all of us making decisions don't want to make
them when there are a whole bunch of cards that
are going to be turned over before too long. Whether
it's buying a washing machine, buying a car, buying a house,
or a business buying a factory. You want the situation
to settle down, and you want to have some sense of.
Speaker 5 (04:31):
Certainty before you act.
Speaker 4 (04:33):
How could anybody act with confidence when you don't know
what the price of steal's going to be, when you
don't know what the situation of your competitors is going
to be. So the traditional approach of policymakers is to
(04:54):
try to provide as predictable an environment as possible so
as to increase business confidence. And this new approach of
trying to maintain maximum flexibility probably is good for raising
the ratings of a TV show because you never know
what's going to happen next, but it's hard to believe
(05:18):
that it inspires the confidence that will be a basis
for investment.
Speaker 1 (05:23):
We talk about systemic risk when it comes to the
banking system. What about systemic risk the overall global economic system?
I mean, apart from the individual tariffs and what consequences
immediate might happen, how big at risk is there to
the system? And I will say, in the past, we've
had some shakeups. I mean, Margaret thatcher Ronald Reagan shook
up a lot of economics. Is this that sort of
(05:45):
a transformation or could it be more profound?
Speaker 4 (05:48):
I think a lot of, not everything, but a lot
of what Margaret thatcher Ron reign did was a necessary
corrective to various kinds of accesses. You know, we had
twenty percent interest rates in the United States. They had
piles of garbage twelve feet high on every street in London.
(06:10):
So I don't think that's the right example for thinking
about this at all. I think a better example is
the smooth Hawley tariffs that we saw. Now, the lore exaggerates,
but I think it's fair to say that the smooth
Holy tariffs contributed to making the depression great.
Speaker 1 (06:32):
Even the issue of smooth Holly raises the larger issue
where are we on the likelihood or probability of recession
or stagflation. Obviously we don't know where we are yet,
but where is that headed.
Speaker 4 (06:45):
I think the odds are on one side or the
other of fifty percent that we'll have a recession within
the next year. The indicators of sentiment, the psychological indicators,
are mostly running really very negative. The hard indicators on
(07:07):
what's actually happening are less negative, but they've had less
time to adjust and are more backward looking and are
less forward looking. So I think the odds of a
recession are probably fifty to fifty. And part of the
reason I think they're as limited as that is because
(07:31):
I think there's some prospect that, particularly if things turned downwards,
they'll be a reversal in course.
Speaker 1 (07:38):
What does this do for some of our economic rivals?
I mean, during the first administration of Donald Trump, he
really focused on China, not exclusively, but really predominantly. This time,
maybe it's not quite so sure. But if you're sitting
in Beijing right now, if your president g how do
you react to these tariffs?
Speaker 5 (07:54):
What does it do to your situation? You know?
Speaker 4 (07:57):
I think it goes beyond the tariffs, David. In China,
the signal event in the lives of people your age
and my age in China was the cultural revolution, when
the government turned against all the traditional leading institutions of society.
(08:19):
And what I hear and see is that the Chinese
see that we are having a kind of cultural revolution.
They also see it as a huge opportunity because they
know better than anyone else how much damage a cultural
(08:40):
revolution can do to a society. And they see us
alienating all our traditional friends, and they see us increasingly
internally divided, and they see us focused on domestic vengeance
rather than global challenges, and they have to see that
(09:04):
as a very big opportunity and perhaps even as a
strategic gift.
Speaker 1 (09:11):
Larry, you always admonish me and us not to overreact,
not to over predict what's happening. So I wander careful
not to do that. But what you're talking about really
goes to the rule of law, which sounds like it's
a really nice concept, but maybe we don't always remember
how that undercurds are capital markets the entire economy. Now,
as you say, we're not at the cultural revolution, but
(09:32):
even shaking it a bit in that direction. When do
we start to see that in barring costs the cost
of capital.
Speaker 4 (09:37):
One of the things people have talked about is American exceptionalism,
and one aspect of American exceptionalism is that multiples the
ratio of prices to earnings are higher here.
Speaker 5 (09:51):
And that's for many reasons.
Speaker 4 (09:52):
But one of those reasons is that if you have
earnings today here, it's more secure than you're going to
have earnings tomorrow because you can count on your property rights,
you can count on being able to enforce contracts. And
if we start attenuating the rule of law, that starts
to go away, and that can take a turn two turns,
(10:16):
three turns off of price earnings ratios, and that's a
loss of trillions of dollars of investment. And so we
take for granted that we make investments with partners, and
we have lawyers who write contracts, and then we know
(10:38):
that contracts.
Speaker 5 (10:40):
Will be enforced.
Speaker 4 (10:42):
You know, one of the things I used to not understand,
and I think I understand better today is why it
is that in so many parts of the world you
have these family clan businesses that are in twenty different industries,
and we have so little of that in the United States,
(11:03):
And the answer is that if you don't have contracts,
then what you have is blood, and so you get
these clan businesses because you can't trust people outside of
your clan, and so you choose your cousin rather than
the best person. That's a price those societies pay economically,
(11:24):
and because we've been so good at the rule of law,
it's not a price that we've paid in the last century.
Speaker 5 (11:34):
But we may be moving back a bit in that direction.
Speaker 1 (11:42):
Coming up, as the US comes to terms with Trump tariffs,
Europe does an about face on defense spending. We talk
with Anna Botine of Santander about what it could mean
for her bank and potential reform of capital markets. This
(12:05):
is a story about two economies in transition. In the
United States, as President Trump shakes the foundations through tariffs.
Speaker 2 (12:12):
Foreign nations will finally be asked to pay for the
privilege of access to our market, the biggest market in
the world, where right now the biggest market in the world.
We had a great country four years ago in terms
of the economics. We were doubling up when China we
were doing so well, nobody was going to catch us.
Speaker 1 (12:30):
And in Europe suddenly facing the need for massive defense
spending it never really expected.
Speaker 6 (12:36):
The era of the peace dividend is long gone.
Speaker 7 (12:40):
The security architecture that we relied on.
Speaker 6 (12:44):
Can no longer be taken for granted.
Speaker 3 (12:47):
The age of spheres of influence.
Speaker 8 (12:51):
And power.
Speaker 6 (12:52):
Competition is well and truly back.
Speaker 1 (12:56):
While the new administration in the US slashes regulations and
the size of the government to keep the country competitive,
the EU is dealing with a stalling economy that is
falling behind its western piers.
Speaker 7 (13:08):
So the US has something really important, which is what
I call a growth mindset. So whatever government is in place,
it has always been more pro growth.
Speaker 1 (13:19):
Anne Boutine is the executive chair of Santander Group, the
fourteenth largest banking institution in the world, with operations in
Europe and the Americas North and South. Thirty eight percent
of its net revenue comes from Europe and South America
comes in second, contributing thirty two percent.
Speaker 7 (13:38):
You can see that in the growth of the last
decade than Europe. So it's early, but I believe that
that is a very positive sign. And as I like
to say, Europe is awakening and the alarm clock has
been President Trump because what I have never seen is
the President of the Commission saying that we're in extraordinary
(14:01):
times and we need to take extortly measures. So it's
not just good for the US, it's good for Europe.
What's happening is good for growth. It's good for citizens
and society, because I believe that is. I mean, there
are the factors that are not as positive, but this
is a very positive signal that businesses will be able
(14:22):
to do more, invest more and create more growth.
Speaker 1 (14:25):
Are we seeing action yet and how much of it
is being triggered frankly by what's going in Ukraine and
European countries deciding they really have to step up and
spend more on defense.
Speaker 7 (14:35):
It's a combination, I think geopolitics and what's going on
in Ukraine, but also the economic, let's say, policies of
the US administration. So I think both of those drivers
for what I see, as you know, the German awakening,
the lifting of the breaks on debt, Germany lifting the
brakes on debt. It's harder except when Europe isn't a crisis.
(15:00):
Feeling now in Europe is we are in a crisis
or we could get into a crisis, and unless we
do something fast, and so there is a sense of
urgency I have not seen before and this is good
also for companies and banks. I mean, we do business
in Europe. You know, one of our biggest markets is Spain.
Spain is going to grow at those two and a
(15:20):
half even three percent depends on who you ask. So yes,
I think what's going on is both structural but also
due to the pressure that we're feeling on both the
war and the economy.
Speaker 1 (15:33):
It wasn't always a positive picture for Spain. During the
European debt crisis of the late two thousands, Spain was
among the five EU member states that were struggling to
repay their debt. Now it's economic growth outpaces Germany, France
and the United Kingdom. Part of the problem is a
European wide monetary policy coupled with fiscal policy run by
(15:54):
the member states, often in different directions. What about capital
markets in Europe, because it's been thought that part of
the driver of growth in the United States has been
the robust capital markets. So people want to raise capital
to invest in, for example, startups and tech companies. Can
you move in that direction to have more robust capital markets?
Speaker 7 (16:15):
This is one of the big goals we've had for years. Again,
what's happened. The awakening that I can see in Europe,
led by Germany and possibly France, means that Germany will
invest one trillion euros one trillion dollars over the next
decade in defense and the way they're going to finance
(16:35):
that is through a common eurobond. So that effectively is
one of the potential drivers for this Common Capital Markets Union,
which we call it in Europe, which again is good
for banks.
Speaker 1 (16:47):
What is the role of regulation in all of this?
I mean, when it comes to the United States. You
famously asked President Trump about deregulation at Davos earlier this year.
What are the regulations that can help or hinder what
you want to do? At Santadre.
Speaker 7 (17:03):
So, regulations matter, That's why I asked the question. I've
been very vocal about this. It's about regulation, but it's
also about supervision, how the agencies interpret the regulation, and
this is one of the quick wins. That's why I
asked the question. So I see governments as enablers for business.
Businesses create wealth, you know, create companies and jobs. That's
(17:26):
where you know, we pay taxes. Government can deliver other services.
So just by getting the balance right on regulation. And
at the end, regulation is there to protect consumers, but
if you overprotect them, you don't grow.
Speaker 1 (17:41):
The European Commission turned to former ECB President Mario Draghi
to study the effects of the single market and competitiveness
in the EU. In the report, published in September twenty
twenty four, Dragi says regulation should be designed to facilitate
market entry, not become a bear to Europe's goals.
Speaker 9 (18:01):
A little over a decade ago, the US and European
GDPs were They weren't exactly on top of each other,
but they were pretty close sixteen versus fifteen roughly. And
now the European GDP is fifteen or sixteen trillion, I think,
and the US GDP is about thirty trillion over the
course of a little more than a decade. And that
(18:23):
is a function. Again, that's a function of a lot
of things, but it's a function of a lack of
investment in productivity and an over regulation of the European economy.
And just as I think that we could have a
significant effect on American growth by streamlining our regulation, I
think you could have an even more dramatic effect on
(18:45):
European growth if they were willing to undertake that deregulatory project,
some of which has been suggested recently by Mario Draghi.
In his report delivered to the European Commission.
Speaker 1 (19:00):
During his tenure as Vice Chair of the Federal Reserve,
Randy Korrels dealt with policy recommendations for regulating financial institutions.
He agrees with drog these concerns that regulations have played
a part in holding Europe back.
Speaker 9 (19:14):
They really haven't created a European wide financial regulatory system,
and that fragmentation contributes to a great deal of cost.
Where there are not conceptually dramatic, but material and important
differences from one jurisdiction to another within Europe with respect
(19:34):
to financial regulation that continue to increase cost. And so
from my point of view, the most important thing that
Europe could do would be to accelerate in advance its
europe wide framework for financial regulation, even more than some
of the important particular changes that they could make. If
(19:57):
Europe could refine its relation of capital provision. The venture
capital ecosystem in Europe, for example, is very underdeveloped, and
the provision of financing really of any sort to startup
companies is not terribly robust, certainly compared to America. The
reason that we have such an advanced tech sector is
(20:19):
that for decades we have had nurtured, tried to develop
a capital financing system that supports the provision of capital
to these risky startup enterprises. And Europe has not done that.
Were they to make changes to the governance of capital
provision that supported particularly that sort of financing, I think
(20:42):
you could, in a relatively short period of time, call
it a decade, make a big dent in that when
you consider how much the technological landscape has changed in
the United States, how different the technologies that are being
deployed now in the US are from what they were
ten or fifteen years ago, all of which supported by
(21:02):
our financing system. If Europe had had a financing system
that was as well geared as ours to supporting that
kind of innovation, they would have participated in that to
a much greater degree than they have.
Speaker 1 (21:15):
Unifying capital markets is not a new concept to Europe,
but the idea has never really gotten off the ground,
and Quarrels thinks that the Trump effect might be what
Europe needs to start moving towards making the changes it needs.
Speaker 9 (21:29):
I think it's true, nonetheless, that Europe has had a
wake up call and it's been very unpleasant. But I
have talked to a number of European policy makers over
the course of the last month that really hasn't been
much more than a month. That seems like it's been
much longer than that. Certainly seems like that to the Europeans,
and there is a intensity and practicality to what they
(21:52):
are now saying they would be prepared to do in
the way of accelerating regulatory change, accelerating investment in defense
that really never was there before. And again, well, it
has been unpleasant medicine, I think it could have a
very good result for Europe.
Speaker 1 (22:10):
In a global economy, the race to grow is not
a solo sport.
Speaker 9 (22:15):
Economics and economic growth is not a zero sum game.
When you have a vibrant Europe, that is you know,
that's better for us. There are many many win win
opportunities when you have two dynamic economies that are interacting, competing,
partnering with each other, and you know, we would be
(22:37):
much better off if Europe were economically healthier than it
is currently.
Speaker 1 (22:42):
And Anna Boutein believes that opportunity for growth and scale
and diversification is the path forward for Santander as well.
Speaker 7 (22:52):
Going back to the key competitive advantages of Santander Global
and in market scale one hundred and seventy three million customers,
one of the largest consumer basis in the world. The
second key strength is diversification. We do better when things
get difficult because we have geographies and businesses that tend
(23:12):
to compensate each other. Now, having said that, we obviously
factor geopolitical risk into our risk analysis, and this is
where being a bank that has been around for one
hundred and sixty eight years helps, right, So we've gone
through many crises, We've gone through Industrial revolution. You know,
we're going through another change in an era right now
(23:32):
with AI, and so we factor that into our processes
and that's one of the things that we do, I
believe better than others.
Speaker 1 (23:43):
Coming up the story of how all that delicious tuna
you enjoy at high end restaurants makes it from the
sea to the table with a little help from private equity.
That's next on Wall Street Week. This is a story
(24:05):
about investing in fish. Those giant bluefin tuna favored by
the best sushi restaurants in New York and all around
the world. Our colleague Danny Berger went to the waters
off of Mexico to see where it comes from and
how private equity is helping to make sure we can
all enjoy it even as demand grows.
Speaker 10 (24:31):
You can thank private equity for this tuna farm. In
November twenty twenty three, a group of investors purchased a
majority steak in Baja Aqua Farms, a producer of high
quality sashimi grave bluefin tuna in the Pacific Ocean off
of Baja California, Mexico.
Speaker 8 (24:47):
This is the only farm in the world that is
being fed by a centralized figure. So there is no
other feeding vessel like this one in the world. So
this was designed by us in integration with Mexicanca Company
and a Chillian company that was working on the engineering
behind this. It's always looking for efficiencies. This vessel what
(25:08):
basically does It receives the sardines from the fishing vessel
that is pumps on the fishholds. Then we grabbed that sardines,
we put it in a big fishhold that we have
here on the main deck, and then with those the
sardines two different cages.
Speaker 10 (25:24):
Baja story began in nineteen ninety nine with just a
few pens and when growing consumer demand was pushing the
industry to the brink.
Speaker 11 (25:33):
If you look at this story of all these familiar
business which baff was not really a family business, but
it was really shape as a family business.
Speaker 10 (25:43):
Manuel Vanscez, a veteran of Nastli and other food companies
around the globe, arrived at Baja Aqua Farms in March
of twenty twenty three as the company CEO this fishery.
Speaker 11 (25:54):
For a long time, it was seen with very bad eyes.
I'm going back to twenty ten, okay, and at that
time the fishery was over fish. There were some indicators
that were saying that in general, all the countries that
are fishing these which is all the way from Japan
to America and Mexico, they were abusing a little bit
(26:15):
on the way that they were taking fish out of
the water. Hence it wasn't danger. We are not fishing
small fish, so we are giving the time for the
fish to reproduce several times before it gets caught. Right
and by definition, if you have an eighty five kilog fish,
you're talking about fish that is more than ten years old,
that has passed that process several times, and then you
(26:38):
can be one hundred percent sure that going forward then
there will be more. And this is really a cycle
that is virtuous and is reproducing, going on and on
and on.
Speaker 10 (26:50):
According to Noah, US, commercial fishers harvested three hundred and
sixty eight metric tons of Pacific blue in tuna in
twenty twenty two, grossing more than two zero point two
million dollars on the dock revenue, which accounts for ten
percent of total Pacific bluefin tuna landings that year. Baja
is in the right place for the business. Japanese and
(27:10):
Mexican vessels harvest the majority of the annual catch. It
starts with the actual fishing. There are two commonly used
methods in the Pacific commercial and recreational fissures either use
hook and line or persains. Baja ops to use per sins,
which are massive nets used to capture the fish but
not lift them out of the water.
Speaker 8 (27:30):
We are now working with the fine tunings, so we
have to improve this vessel. We have to bring another
vessel to the rest of the cages because we are
capable to fit twenty four here, but we have forty.
We're going to have fifty in the next July. So
we got to move fast because if we want to
keep all the benefits that we've been gaining with this
investment in the other cages, then we got to replicate this.
(27:51):
So the next thing is to come with another grid,
and then we have to bring another feeding vessel like
this one, and that requires money.
Speaker 10 (28:01):
How much could you theoretically grow by double the size
of what you have here?
Speaker 8 (28:05):
Yes, yes, we can go with double ba.
Speaker 10 (28:09):
Aqua Farms hunts by air for schools of wild bluefin
tuna in the Pacific corrolse them and towes them to
their farm pens off the coast of Ensenada, Mexico. There
they feed and tend to the fish's environment until they
reach the ideal size for market, harvest them and bring
them to their processing facility on land. The fish are
(28:30):
graded for quality and either cut or packed hole for
shipment to customers enter private equity.
Speaker 12 (28:37):
These are one hundred and seventy five to two hundred
pounds a piece, and most restaurants in the country didn't
actually need that much tune at one time. So what
restricted actually who the company could sell to.
Speaker 10 (28:49):
Equity Group is the private equity investment arm of the
Zell family, founded by billionaire investor Sam Zell, who passed
away in twenty twenty three. It still invests cell family
assets target and not specific industries, but certain features.
Speaker 12 (29:03):
Run companies, and I used to work at Coca Cola,
and I ran budget, ran a car, and I ran
a software company, which I think is a little a
typical for somebody as a president of an investment firm.
I think it's relevant because what's going on in private
equity right now. You know, there's lots of capital, and
there's lots of firms and a lot of competition. We
(29:24):
cut across a lot of industries. So we're in healthcare,
we're in agriculture, oil and gas, real estate. We have
a company that sells software to the NSA, so you
name it. We cut across a lot of industries. We're
usually looking for something about the industry and something about
the company where there's a barrier or some type of
(29:45):
structural advantage. So what that makes us do is actually
look across different sizes and in particular different industries.
Speaker 10 (29:54):
In early twenty twenty three, rather unusually, a number of
investors heard about the promise of tune A Fie fishing
and Baja Aqua farms at the same time.
Speaker 12 (30:03):
There's a lot of strong growth in the bluefin tuna market,
so inherently it's been growing for decades. And then on
the supply side in the industry, it's a regulated global market,
so there are quotas internationally. You can't just go out
and fish as much as you want. In each country.
There are concessions, so you have to have the right
(30:23):
and a concession to actually grow the tuna. And then
there's actually licenses that you need for the fishing boats
and the captains. So the demand's growing and the supplies
got some controls around it. So that's what we liked
about the industry. The company has got a few structural
advantages that we really appreciated, and they revolve around its proximity.
(30:45):
It's based in Mexico, and this industry, you can imagine
a tuna is heavy, right, two hundred pounds, and so
shipping a tuna, especially air freight, is very very expensive,
so are competitions in Japan and the Mediterranean. Mexico, so
the proximity to the US is a huge advantage for
this company to ship fish from Mexico into the US,
(31:07):
so that's one. The second one is the labor cost
in Mexico is cheaper, so there's an advantage there. And
then the third component is just the cost of feeding
the tuna. So you feed them anchovies, you feed them sardines,
and structurally it's been really a positive that where we
fish for the tuna off the coast of Mexico is
very close to where we fish for the sardines, so
(31:29):
that lowers the feed cost.
Speaker 10 (31:32):
Conti, Cultiba Equity Group and Cassel Harlan purchased a majority stake,
leaving dry Powder in their arsenal for ongoing support. They've
also each sent an executive to Bajas board. The goal
is essentially the same as any other private equity investment,
grow the customer base, expand to new markets, and invest
in new technology, equipment and staff.
Speaker 6 (31:57):
We have the best brothers them as we tried who
Growwindo Martin and as we have more supply now.
Speaker 1 (32:01):
Because the colt that has increased. Now the real challenge
is to build those markets.
Speaker 13 (32:07):
We are waiting the fish older, so after we grade it,
then they're cutting the tail and those guys over there,
they are going to win the fish.
Speaker 6 (32:17):
So they are going to put again this camp with
the exact wave of the product before putting it into
the bus. So if it is going to Japan, and
we'll go to one side, Brazil, Colombia, Lubai, the state's
interial east coast, west coast and.
Speaker 10 (32:32):
Make this incredibly huge logistics operation. It is it is fresh, Well, yeah,
it's fresh. It's so many different sizes. You're shipping it
literally all over the world and you have to, I
guess calibrate as each one comes in which client it's going.
Speaker 11 (32:47):
To, Yes, indeed, and then we are tracking over there
and obviously the distance from one point to the end point,
so there's airports connections. Even the barcoo that you.
Speaker 2 (32:58):
See over there in the mouth of the y it's
also ours.
Speaker 13 (33:01):
It's just just a software that illustrated inside. There is
also a thermometer that is coming into the fish and
is tracking the temperature of the fish from that boy
until you up in the bus.
Speaker 11 (33:16):
We will need to expand and that's a challenge too,
So it's a bit of testinal the promises. As you
can see, there's no machine but.
Speaker 6 (33:24):
That can actually replace these labor because of these specifications
that we have in the product and what you have
on the value proposition through our consumer. But at the
end of the day, yeah, we will need to expand
and get more people and more production lines in order
to bring all this volume.
Speaker 10 (33:39):
Into the company.
Speaker 1 (33:42):
And that's where we turn next to how a private
equity firm founded by Sam Zell stepped up to provide
the capital and the expertise Baha needed to grow its business.
(34:07):
EGI joined with others to provide the capital Baja Aqua
Farms needed. How is that capital being deployed and how
is it changing the way Baja does its business. Dannie
Burger continues the story.
Speaker 10 (34:23):
After nearly a year and a half with private equity
on board, Baja is putting its new capital to work.
Speaker 8 (34:29):
We got an investment plan of around five millions per
year which is going entirely to fishing assets, to farming assets. Yeah,
so you keep things running right, so you have maintenance
kpex and then growing kepex. We have a plan for
eight millions this year which is a new vessel that's
(34:51):
going to be incorporated to the fishing fleet, and then
we have some growth kapex that's going to be here
at the farm. You see around mooring grates right, So
there's a big bound of cages there, thank cages there,
tank cages there all together in a solitary mooring system.
(35:11):
And also we have some solitary systems which is holding
one cage. So this year we're investing another million in
putting another grid. So we're putting gauges together like this
one to facilitate the feeding.
Speaker 10 (35:25):
Equity group, along with the rest of the investor consortium,
owns a majority stake in Baja. The goals of private
equity in any investment are the same, grow the company
and get a return on the investment. But egi's timelines
are different from what you would expect when you think
of private equity. So you mentioned it takes some time
you have to capital into this business to get the
returns you want. What does an exit look like for
(35:48):
something like Baja Aqua Farms.
Speaker 12 (35:51):
We don't put a time horizon on our investments. It's
actually something that's a little different, I think from most
pe firms. Most of them comes from Sam Zell and
his family, so we're a principal investor and we sell
when we've extracted as much value as we think we can.
We really haven't even begun to penetrate the United States.
(36:12):
There's new products that we can develop, and we're even
going to explore maybe potentially other geographies to ficient. So
there's a lot of growth potential here. We've held companies
for five years, we've held companies for fifteen. It's all
just a function of how much more growth we think
is out there.
Speaker 10 (36:29):
Recently, private equity exits have taken longer and longer to execute.
According to a twenty twenty five Mackenzie outlook for global
private markets, average buyout whole times remain above the long
term average at six point seven years. That compares to
the average of five point seven years over the past
twenty years. Is there a way to get returns out
of the company? Do you look for ways to get
(36:50):
dividends of sorts and the lead up to the exit.
Speaker 12 (36:53):
Yeah, no, for sure. That is actually a really core
part of what we do. Part of it is MEYBI
in an operation is very focused on that. We do
expect our companies to generate cash and it's just kind
of mandatory for us. Some of that is the investment
thesis understanding the type of business that we invest in.
But absolutely we're not going to hold something for ten
(37:14):
years and not take money out of the company. You know,
maybe the first year or two the company net isn't
generating cash because we're investing. We're putting in new technology,
new people, all the things I've talked about. But absolutely
there's an expectation that we're diving ending money out and
as the EBADAG grows, as the profits grow, will also
every few years recap the business and take money out.
(37:35):
That way, you know, our expectation is four or five
years in if things are tracking, we've got all our
money out of the investment that we've put in.
Speaker 10 (37:45):
Equity Group's patient capital and holding times may be different
from their pepers, but one thing is the same. Private
equity ownership means big changes for the companies that they own.
Speaker 12 (37:57):
The company was selling in the US, but they were
using one distributor, mostly in southern California. So we've helped
them roll out that we have now I think eight
distributors across the entire US. We're also not just using distributors,
we're actually building a salesforce going into the markets and
selling the restaurants directly. So there's things like that that
(38:18):
we help the company put in place, and that's going
to create growth in and of itself. Just at one point,
we've gone from three countries when we bought the company.
We're up to nine right now, and so we're expanding
in these other geographies. They've got their own consumer demand,
they've got their own regulatory environments, so there's a lot
(38:40):
of different issues you have to work through as you
roll into new countries. Another aspect, which is enormous is
when we bought the company and they sold tuna, they
would actually sell the entire tuna. So if you're a
restaurant and you wanted fresh bluefin tuna, you would have
to buy the entire fish. These are one hundred and
(39:01):
seventy five to two hundred pounds a piece, and most
restaurants in the country didn't actually need that much tuna
at one time, so it restricted actually who the company
could sell to. So we're working on a project right
now where we're going to sell loines, which is just
basically selling part of the tuna, and that's going to
open up probably tenfold as many restaurants as we're selling
(39:26):
to right now.
Speaker 10 (39:28):
Jeffs Franklin Becker and Robbie Cook of coral Omakasse in
Point Seven in New York source tuna from Japan and
the East Coast of the US. Their merchants used similar
practices to Baja, no catching tuna and nuts, no antibiotics,
no hormones, native and national feed traceability and ECOGIMA. You're
a veteran in this industry. You've worked with lots of
(39:49):
different kinds of meat, different types of fish. Can you
just talk about working with bluefin tuna? About how special
and different that is?
Speaker 14 (39:56):
Bluefin tuna. It's so unique because because it's just got
the right amount of fat and the right amount of
marbling throughout the structure the fish is is it's just
a beautiful fish at the end of the day, robust
in flavor, beautiful color. When you get down into the
chewturo and the o touro, which is the medium fatty tuna,
(40:19):
and the fatty tuna just melts in your mouth.
Speaker 10 (40:22):
What do you make about this, this current moment of
the popularity of the fish itself.
Speaker 14 (40:26):
You know, for a while it was overfished, and for
a while people were kind of avoiding it, including myself,
and thankfully the populations come back in a big way.
They also do a process called ikagema, which is basically
they stick a rod into its head, into its spinal
cord and they bleed it out that way, and that
(40:50):
prevents all the fish from basically atrophying the wrong way
and the meat becoming tough, so that kind of keeps
it really nice.
Speaker 10 (41:02):
Point seven and coral omacasse are also examples of demands
for cuts of fish, not the entire bluefin.
Speaker 14 (41:09):
If you're buying the whole fish, you're buying it because
a you have the storage space to handle it, which
is a huge commitment all on its own, you're going
to be able to turn it over. You have multiple
restaurants in my case, with a twelve seat o macasse,
it does not make sense.
Speaker 10 (41:27):
Beyond the quality of fish. Fuel and growth at Baja
Aqua Farms meant new boats, more sophisticated and scalable IT systems,
net cleaning and other maintenance systems, a larger sales staff,
and crucially a new CEO.
Speaker 12 (41:41):
We start with trust and transparency. I mean, if we
can't work together, that's going to be just a non starter.
We look for alignment. It doesn't mean we always agree,
But can we all see true north?
Speaker 4 (41:55):
Can we all.
Speaker 12 (41:55):
Agree that the direction we're going in makes sense? So
that's got to be there. And then look, you know,
leaders have to inspire. They have to hire good management themselves.
Have they built a good organization? Have they built a
good structure? Have they hired talented people to people like
working there?
Speaker 10 (42:14):
New management comes with the territory. When private equity comes
to the scene with a one of a kind feeding system, efficiencies,
new products and markets. It's up to the CEO to
manage and execute growth. His goal is to add one
thousand more metric tons of tuna sales every year from
four and twenty twenty four to five thousand this year
and six the next. What do you think are some
(42:36):
of the biggest changes that have been put in place
since you and the investors have come in.
Speaker 11 (42:40):
In order to have the same product with the same quality,
always right, with the same timeline, with the same freshness,
with the same everything, you need to have a process.
And in order to scale a business, you need to
have those processes all around the company, even from the
way that we fish, the way that we grow the fish,
(43:02):
to the way that we go and do the logistics
to the final restaurant that we have grow, grow, Grow growth.
Last year there was a significant change also because of
all these things that I'm telling you and the way
that we're fishing. So they increase fifty percent the quota.
That means that this year, for the first time.
Speaker 3 (43:21):
On the last.
Speaker 11 (43:23):
I would say, fifteen years, we are allowed to go
and finish more fifty percent more of what this stack
or this gap was allowing ones to get. As a
result of that, if you are bringing that supply into
the market, you need to grow the market very responsibly.
And for that we created three different segments now which
(43:47):
is ready to God, ready to serve, ready to eat,
to have an investor group that believes in that vision
and that is not only endorsing it, but it's facilitating
the way to go there much more fast.
Speaker 10 (44:01):
What has been the biggest difference or surprise or change
for you to work with a company that's private equity.
Speaker 11 (44:07):
Backed that is always the smarter people in the room
than me. Yeah, it's always challenging. Yes, And when I
am with this diverse group of people and I hear
all these ideas, there will always be things that I
have not seen or comments that I have not heard
(44:28):
or even ideas that I never thought of. But that
is actually very exciting. On the downside, I told you
what it was. On the good part of it is
that it's always keeping me at the edge and with
all this adrenaline and trying obviously to improve as a
person and also to try to grave all these knowledge
(44:50):
that is there out. We don't take a fish out
of the water unless it's already solved, which is very
very important for us.
Speaker 10 (44:56):
What markets do you want to expand into?
Speaker 11 (44:59):
South America? Very interesting and we are moving forward very
rapidly there. Middle East looks very interesting and we want
to also check that market, and specifically the East coast
of the United States is also very important to us.
We are very strong on the West, but if you
move east, then we start seeing some white spots. So
(45:25):
now we change that strategy. We actually got the country
in five different regions.
Speaker 10 (45:32):
Almost exactly a year after the Investor Group acquired at Stake,
a new presidential administration won the White House promising tariffs
specifically aimed at products from Mexico. How do you think
about those costs and who they go towards? Do you
push that forward to the consumer? Do you push it
forward to someone else.
Speaker 12 (45:50):
We're in a lot of industries that we hold companies
for a while and we see the environment change, sometimes positively,
sometimes negatively. So it could be the consumer. Could we
own a hospital chain and we owned it and managed
it through COVID, so we dealt with that, that's a disruption.
We own a warehouse company on the East coast ports
(46:11):
and we dealt with the Baltimore Bridge collapse. So you know,
and we're in cyclical industries. We're in oil and gas,
we're in real estate, we're in agriculture, so we see
most of our companies actually have a lot of ups
and downs. Tariffs are just, in my mind, another type
of headwind that a company potentially is going to face
(46:34):
for some period of time in terms of if there
are tariffs and how we'll manage it. Look, I think
the answer is going to be it's the cost is
going to get spread. We'll probably end up absorbing some,
some will get passed along to the consumer. If you
remember the value chain here, there's the consumer, there's the restaurant,
there's the distributor, there's ourselves. So there's a series of
different ownership groups all along the value chain. And I
(46:57):
guess is every part of the value chain absorbs or
part of that.
Speaker 10 (47:01):
Cost tariffs aside, everyone along the food chain recognizes what
matters to consumers in the marketplace.
Speaker 14 (47:07):
You can have a bad fish coming out of Japan
the same way you can have a bad fish coming
out of California or Spain or North Carolina. It all
comes back to the beginning. How is that fish caught,
how is it killed, how is it preserved? What did
they do? How long was it on the boat? All
of these things matter. It comes down to authenticity. It
(47:30):
also comes down to the fat content, and it just
melts in your mouth and it becomes this experience that's
almost religious.
Speaker 11 (47:40):
I mean, that's it.
Speaker 1 (47:46):
That does it for us here at Wall Street Week.
I'm David Weston. This is Bloomberg. See you next week
for more stories of capitalism.
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